commentary on Politics and a little bit of everything else

GM settles on returning 661 dealership back into the fold……

[ Larry Noga working last May at the Balzekas Chrysler dealership in Chicago. The dealership was slated to lose its franchise.]

It’s always better to settle…….

Ask any lawyer……

That is more than half of the roughly 1,100 dealers who filed to challenge G.M.’s terminations through an arbitration process established by Congress.

G.M. said that it was calling and sending letters to the dealers being allowed to stay open and that they would receive notification by Monday.

“By doing this, we save a lot of time, energy and dollars, saving us and dealers from going through what could be a very long arbitration process,” Jim Bunnell, G.M.’s general director of dealer network support, said in a conference call with reporters.

Mark L. Reuss, the president of G.M. North America, said the dealers to be reinstated were chosen based on business criteria, not because they were likely to win in arbitration or to put up a costly fight.

“We’re trying to do the right thing for our dealerships, for G.M. and for the taxpayer, quite frankly,” Mr. Reuss said.

The arbitration process was established by Congress after its members were inundated by complaints from G.M. dealers in their districts.

But as its sales fell last year by about 50 percent, the company said it needed to thin out its dealership network so it and the remaining dealers could be more profitable.

Congress has made no similar demands that G.M. revive its factories.

The dealers that G.M. is allowing to stay open will have 10 days to review and sign the letter of intent they will receive from the company, then 60 days to fulfill new requirements, including maintaining adequate capitalization and financing.

G.M. had been concentrating on consolidating its operations to match its diminished market share, but Mr. Whitacre has pushed people at all levels of G.M. to focus primarily on selling more vehicles. Having more dealerships could help him accomplish that goal.

Many of the terminated G.M. dealers never announced their status publicly and continued to operate much like other dealers except that they were not allowed to order new vehicles from factories. Still, their inability to sell the most popular models since last May undoubtedly cost them customers and hurt G.M.’s overall sales.

March 5, 2010 - Posted by | Automobiles, Breaking News, Government, Law, Media, Other Things, Travel, Updates | ,

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